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New data from Metrostudy indicates further strengthening of the U.S. housing market. In this article from Builder, Hanley Wood’s Charlotte O’Malley analyzes the data, noting that the housing market as a whole is in a much better spot than it was a year ago, and predicting a continuation of the year-over-year growth trend.
Our October collection of new home and building lot demand in Metrostudy’s 36 markets indicates that typical seasonal decline continues in the majority of markets, but inventory in the pipeline appears stable, and the pace of starts continues to climb. Despite the expected seasonal decline, 66% of regional directors recorded a higher score for new-home demand in October 2015 than in October 2014, and only eight markets decreased year over year. Houston, Raleigh-Durham, San Diego, and Southern California were among the eight markets reporting a decrease, a sign that other markets are now catching up in the recovery given that those four markets have been in the top half of our scale for the past year, while other markets have wavered at the mid-point.
Similar to the notion that seasonal slowdown will be a passing storm weathered by spring, the Conference Board’s Consumer Confidence Index fell to 97.6 in October following a reading of 102.6 in September. However, the share of respondents planning to buy a home within six months (which puts us at the start of spring selling season) rose 1.5% month over month to 6.3%—a good sign for the future.
The Phoenix-Tucson market has made the biggest year-over-year gains in our new home demand index, jumping from a score of 3 in October 2014 to a 7 this October.
Although Seattle was never in limbo, new-home demand in that region has increased significantly year over year as well, jumping from a score of 7 to 10.
Houston and Dallas-Fort Worth have been markets to beat during the recovery, but commentary from our regional directors indicate that they’re still trying to catch up after a spring selling season riddled with horrible weather.
You love your apartment, you love your location, but you’re not loving how much your paying every month in rent. Do you give it all up and move to a different place to save money? This U.S. News article offers some advice from Niccole Schreck, rental experience expert for Rent.com.
If there’s one thing all renters worry about, it’s how much they’re paying for rent. While most financial experts agree that the amount you pay per month should be less than one-third of your monthly income, young renters with entry-level salaries sometimes have a tough time paying less than half of what they make.
With rent prices going up across the country, many apartment dwellers are questioning whether paying so much is even worth it. While many people would never give up a great location downtown – even though they’re paying a few thousand more each year – others may wonder if moving farther away from cities for cheaper rent could help them create a more fulfilling lifestyle. So, what do you think? Is relocating to give yourself a financial break worth it? Here are some tips to help you decide.
Think about the other side of the coin. If you’re considering relocating to a smaller city, town, suburb, or a less expensive neighborhood, you’re likely considering the benefits. And these advantages are nothing to scoff at, either: Paying less for rent means more money for necessities, entertainment, savings and retirement. In turn, this means less financial stress overall. For most people, that would be a huge weight lifted.
However, before taking the plunge and relocating, it’s crucial to look at the flip side of the coin. You know what you’re gaining, but what might you be giving up? A great location with a lot of things to do nearby? Living in the same city as your friends or family members? Being a quick jaunt away from work on public transit? These factors should be considered.
Give the commute a try. For many, relocating to pay less in rent means lengthening their commute substantially. Some people in this situation opt to find another job, while others choose to commit to the long commute. However, it can be easy to underestimate the toll of this longer trip from home to work.
Tacking on an extra 45 minutes to and from work takes almost two hours out of your day. Before committing to the relocation, give the commute a try and see how long it will realistically take. Will you be able to handle it daily if you decide to move?
Ask friends and relatives. It’s never a bad idea to talk to your friends and relatives about whether relocating is right for you. In particular, try to talk to someone who lives in the city or town where you’re considering relocating. Does he or she think the move will be worth it? Is it a place he or she could see you flourishing?
Do some exploring. If you do decide to relocate, what will you miss most about where you currently live? If you live in a big city, spend some time exploring your favorite places and neighborhoods, and really think about whether you would miss having easy access to them.
Then, explore areas of the city you don’t know as well. Walk around neighborhoods that are less expensive than where you’re currently living, and see what they have to offer. Maybe you’ll find that relocating to a neighborhood that doesn’t cost quite as much is a good compromise.
A list of U.S. cities that offer the highest income consists of all the big cities you’d expect. But factor in the cost of living in those cities to create an understanding of “real” income, and the list looks very different. This Forbes article from Joel Kotkin highlights some of the cities that top that list, including Houston, San Jose, Dallas-Fort Worth, Atlanta and Charlotte.
Average pay varies widely among U.S. cities, but those chasing work opportunities would do well to keep an eye on costs as well. Salaries may be higher on the East and West coasts, but for the most part, equally high prices there mean that the fatter paychecks aren’t necessarily getting the locals ahead.
To determine which cities actually offer the highest real incomes, Mark Schill, research director at Praxis Strategy Group, conducted an analysis for Forbes of the 53 largest metropolitan statistical areas, adjusting annual earnings by a cost factor that combines median home values from the U.S. Census (20%) with a measure of regional price differences from the U.S. Bureau of Economic Analysis (80%).
The takeaway: When cost of living is factored in, most of the metro areas that offer the highest effective pay turn out to be in the less glitzy middle part of the country.
Ranking first is the Houston-the Woodlands-Sugar Land metro area, followed by one high-cost outlier: San Jose-Sunnyvale-Santa Clara, Calif., aka Silicon Valley. Although average wages in the San Jose area are $38,000 higher than Houston’s $60,096, the much lower cost of living in Houston means residents there are effectively slightly better off. Adjusted for costs, Houston’s average real income is $62,136. A big contributing factor is Houston’s low home prices: the ratio of the median home price there ($215,000 in the third quarter) to median annual household income is 3.1, compared to 7.5 in the San Jose area (median 3Q home price: $795,000).
San Jose’s high ranking is somewhat of an anomaly: the very high salaries paid by the tech industry in a metro area made up of largely affluent suburban communities go a long way to make up for the high prices. San Jose’s prices were the third highest among major U.S. metro areas in 2013, the most recent year for which the BEA has data — 21.3% above the national average — while the average annual wage of $98,247 as of this year ranks first.
But for the most part, it’s the low-cost heartland that dominates the top 15 of our ranking of Cities Where Your Salary Stretches The Furthest.
Our paycheck analysis does not impact everyone equally. Given the central role of housing, for example, long-term residents who bought their homes before prices began to rise dramatically can keep a bigger portion of their take-home pay, and if they decide to sell, they’ll benefit greatly from inflated values. More directly impacted may be young adults and immigrants, most of whom do not own their own homes, and often lack the resources to buy in the more expensive markets.
Over time this could influence where young families and singles chose to migrate. Since 2010, according to an upcoming study by Cleveland State’s Center for Population Dynamics, there has been a marked shift of college educated workers aged 25 to 34. While between 2008 and 2010, metro areas like San Francisco, New York, Los Angeles, San Jose and Chicago enjoyed the biggest upticks in this coveted population, over the most recently studied period, 2010-13, the leaders were generally less expensive places like Nashville, Pittsburgh, Orlando, Cleveland, San Antonio, Houston and Dallas-Ft. Worth.
This suggests that areas that have both high-wage jobs and low costs are likely to gain momentum in coming years, particularly if the economy expands. This is not to say that people do not like the excitement and culture associated with San Francisco, Los Angeles or New York, but many may be finding that the price of admission to these fabled places may be too high.
This could be a great opportunity for less-heralded communities, from Arizona and Texas to Ohio, to gain more educated workers and the companies that require them.
If you’re selling your home, and planning to show it any time soon, here’s a great reason to declutter and clean out your garage. The Wall Street Journal’s Leigh Kamping-Carder reports on data compiled by economic researchers at Realtor.com to see just how much more each additional parking spot adds to a home’s asking price.
When it comes to buying a home, there’s no such thing as free parking – but what is the premium for each additional car space?
In an analysis based on median listing prices per square foot, website realtor.com looked at all single-family homes listed between Jan. 1 and Oct. 31 to find how much more home sellers ask per parking spot. (Homes with zero bays weren’t included.) While prices rise with each added space, as might be expected, the jumps are greater at a couple of surprise points.
The first sharp rise is for three-car homes, which were priced 11.45% higher than those with a single spot. Most homes have two-car garages – they made up almost 64% of listings – but three-car homes tend to be larger and higher-end, bumping up prices, says Javier Vivas, realtor.com’s economic researcher.
Similarly, homes with a seven-car capacity asked a striking 31.42% more than one-car homes, the data show. That may be because homes with four or five parking spots – a two-car garage with a wide driveway, for example – may be large but not necessarily luxury, Mr. Vivas says.
Curiously, homes with two-car garages were 2.71% less expensive than homes that fit a single car. While such a small difference is the result of the mix of listings, Mr. Vivas says, single-car homes are more likely to be smaller spaces, which fetch a premium nationally on a per-square-foot basis.
Would you like to know the cities where more married couples are purchasing more new homes? If you just said “I do,” read on! In this article from Builder, Katie Gloede highlights the top markets for married new home buyers.
Even beyond a starter home, some markets are saturated with married couples dominating the majority of new home sales, while some metros attract nearly a 50/50 split between married and single new home buyers.
Using data from Metrostudy Analytics, we searched for the top 15 markets with the highest percentage of new home buyers being married over the last three full years – 2012 through 2014.
While it’s likely no surprise three markets in Utah – a state with extremely high marriage rates – made the cut, the top market is a bit of a surprise. San Jose, Calif. was No. 1, where an average of 91.14% of new home buyers were married between 2012 and 2014, the height occurring in 2013 at 92.80%. The Washington, D.C., metro area, where marriage rates are a bit lower than many other big cities, also ranks high at an average of 86.74%.
Other major markets that top the list are Bakersfield, Minneapolis-St. Paul, Dallas-Fort Worth, San Antonio, Houston and Denver.
The road to a renewable energy future is getting a whole lot sunnier, as highlighted in this article from Adele Peters of Co.Exist.
One year after a bike path outside Amsterdam was plastered with custom solar panels, it’s generating more power than predicted – and the designers are convinced that it’s proof that networks of solar-covered roads could eventually be a viable energy source.
While typical rooftop solar panels are cheaper to build and can pump out more power, the SolaRoad team argues that pavement could add valuable real estate as roofs start to fill up. In the Netherlands, there’s more available space on roads than all rooftops combined.
“Solar panels on rooftops are a no-brainer and fortunately the application is growing rapidly,” says Sten de Wit from the SolaRoad consortium, adding that some cities are also experimenting with solar panels next to highways. “If we can additionally incorporate solar cells in road pavements, then a large extra area will become available for decentralized solar energy generation without the need for extra space … and just part of the roads which we build and use anyway.”
Though the prototype was pricey, and the team doesn’t yet know what the final cost will be, they’re aiming for it to pay for itself over about 15 years of use. A solar-paved street could ultimately be cheaper than something made of asphalt or concrete.
The pavement could power streetlights, electric cars, or just send power into the local grid.
What will the world look like in 2020, and how will our homes adapt with changing technology? In this article from TechCrunch, Diomedes Kastanis of Ericsson shares his predictions.
As a driver of technical innovation for a software company, a huge part of my job depends on forecasting how current tech trends will play out, merge, dissipate or expand. Here are some of my predictions of what the world will look like in 2020.
Right now, there’s a lot of excitement about the Internet of Things. We’re connecting everything: your thermostat, your refrigerator, your car, your garage, your garden… That means lots of sensors and meters. We’ll be measuring, tracking and analyzing even more than we already do.
But in 10 years, as it matures, we’ll see this connected ecosystem simplify.
Rather than gauging if the toilet has enough water, the soap bottle is full enough and the lights are the perfect level, your smart bathroom can ask, “How was your visit?” You can say “Good,” or perhaps, “Bad – there wasn’t enough soap.” This eliminates the need for so much tracking, and makes the experience feel more human. Ultimately, our devices will rely on our feedback just as much as data.
Think of the things you use every day: your smart phone, your computer, your desk and so on. You own most – if not all – of those things.
However, in the future, you’ll probably share most of them.
We’ve recently seen a huge rise in the sharing economy; not only can you stay in someone else’s house via Airbnb, but you can sail in someone else’s boat through Sailo, fly in someone else’s private plane via OpenAirplane and go snowboarding with someone’s else’s board via Spinlister.
This is only the first wave. Major players like Google, Apple and Uber are developing car technology so that, in five years, rather than driving to the office in a car you own, you’ll drive to work in a car you ordered on your cell phone that morning. If you wanted, you could drive a different make and model every day.
Oh, and that office? Not only has it been chosen to be optimally located for you and the co-workers you need to meet with, but it’s pre-loaded with your information and work preferences.
The sharing system is far more efficient, as it enables resources to be active 24/7 rather than just when we’re personally using them. And because everything will be tailored to our needs and desires, we’ll still feel like what we’re using is “ours.”
In the past, we relied solely on keyboards to control our devices. Then, speech recognition technology came along, and now has improved to the point where we don’t have to touch our gadgets if we don’t want to.
The next logical progression is mind-controlled technology. Scientists have already developed prosthetics that amputees can operate with their brains. A new wireless transmitter allows paralyzed patients to control their TVs, computers and wheelchairs with their thoughts.
In the future, I believe these brain-computer interfaces will be universal. Rather than say, “Hey, Siri,” you’ll think, “Hey, Siri.”
Reporting from this year’s National Association of Realtors convention in San Diego, Steve Kerch of MarketWatch highlights real estate analysts’ predictions for next year’s U.S. housing market, and its effect on the overall economy.
The housing sector will be a positive contributor to the U.S. economy in 2016, overcoming concerns about rising interest rates, tight mortgage credit and student-debt burdens that are holding back many buyers, according to analysts.
“This was a good recovery year for housing, although not anywhere near the peak in terms of home sales,” said Lawrence Yun, the NAR’s chief economist. “Next year the recovery continues, but it will be at a slower pace.”
Yun said he expects as many as 5.5 million existing-home sales in 2016, up from an estimated 5.3 million this year. The median home price across the U.S. is expected to rise 5% next year after an increase of 6% in 2015. That should help push GDP to a 2.7% growth rate for the year, he predicted.
While home prices have recovered in many areas of the country to meet or exceed their peaks during the housing bubble, home sales still remain 25% below their top in 2005.
Cris Deritis, senior director of consumer economics for Moody’s Analytics, said there are three key areas for optimism about housing in the coming year: the labor market is coming back to near full employment, wage growth is finally picking up and there are millions of new households waiting to be formed that have still not done so thanks to the Great Recession.
“The key driver there is we have 4.5 million more 18- to 34-year olds living with their parents than at the start of the recession,” Deritis said. “With rents rising and wages growing – and the parents pushing – that should send many into the housing market.”
Millennials are “very into real estate,” according to Realtor.com economist Jonathan Smoke. “Real estate is cool again – especially for young people.” This article from The Dallas Morning News highlights some of the reasons why more millennials are starting to make their move towards home ownership.
When it comes to the housing market, increasingly it’s all about the millennial.
“They are not only the future, they are the present for housing,” said Jonathan Smoke, the top economist for Realtor.com. “They are the biggest age group buying homes today.”
Millennial buyers currently account for almost 30 percent of nationwide home sales, according to the latest surveys by the National Association of Realtors.
“Millennials are 60 percent of first-time home shoppers,” Smoke told Realtors who met in San Diego over the weekend for the industry’s annual conference. “There are 87 million of them. They outnumber every generation – including the baby boomers,” he said. “By the end of the year, almost 2 million home sales will be to millennials.”
Millennial buyers will have an even greater impact in Texas, where large numbers of young workers are moving to take thousands of new jobs, Realtor research shows. The state already has a slightly higher percentage of first-time buyers than the rest of the country.
Three-fourths of millennials that bought homes this year came out of apartments.
Another 20 percent are leaving their parents homes after graduating from school and starting careers, Realtor research shows.
“They are suffering from ever-increasing rents – that’s driving those that can into the market,” Smoke said. “They are dreaming about escaping from mom and dad’s basement.”
